Low Cost IVA

Historically there has always been a relationship between the level of the IVA applicant's debt and the amount they will be expected to repay through their IVA contributions.

Low Debt - Low Cost

As you can see at the side of this page, the Debt Slider highlights this correlation.

The further to the right the slider is moved, the higher the debt level rises and the higher in turn the minimum IVA payments becomes.

And equally, the further to the left you slide the button, the lower the debt level falls and the lower the minimum IVA payments becomes.

But, sometimes, the minimum IVA payments level is still beyond the affordability of the applicant, which suggests they will not be able to apply for an IVA which is not strictly true.

Low cost IVA payments

In certain situations it is possible to offer a figure lower than the minimum requirement, particularly when it is known beforehand that the IVA payments will be able to rise at some point in the future.

An example of this would be where the applicant has a Hire Purchase loan which will shortly be completing.

If the expected increase to the IVA payments is sufficient to raise the average contribution back to the minimum level, then creditors will consider it as a viable offer.

Low cost IVA fees

Since the introduction of the IVA protocol, the size of the IVA fees have been related to the size of the IVA contributions.

This means that the lower the IVA contributions, the lower the fees are that the IP can charge to the creditors.

The relationship between the IVA contributions and the IVA debt level is an important factor in this calculation too, because, the lower the debt level in the IVA the lower the IVA contribution will be.

So, creditors and IPs recognise, the lower the debt level, the lower the IVA payments and the lower the IVA fees.

IVA Fee reductions

At the Creditors' Meeting, a decision will be taken by the creditors as to whether the IVA fees are reasonable or not.

Creditors will negotiate a reduction in the fees if they feel the IP is overcharging them for the work done in relation to the IVA, as they will be paying the IVA fees.

A reduction in the IVA fees will not make a difference to the size of the IVA contributions paid by the applicant, as IVA payments are calculated on affordability, but it will mean that creditors will be able to keep more of the money paid back for themselves.

Professional Advice

For more information about low cost IVAs call 0800 088 7503 and speak to one of our advisers or complete this form and an adviser will call you at your preferred time.

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In accordance with the Financial Conduct Authority's guidance, please follow this link if you would like to read a free guide about In Debt - Dealing with your creditors
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